Luminar sale approved despite last-minute mystery offer | TechCrunch

Just before a bankruptcy judge was expected to approve the sale of Luminar’s lidar business, an unknown party submitted a bid that apparently rejected the highest bid of $33 million.

The offer, made just before Tuesday’s hearing, kicked off a series of quick meetings between Luminar’s remaining leadership team and its lawyers, a “special transaction committee” created to navigate the bankruptcy, and ultimately the company’s entire board.

Although the offer was “substantially higher”, according to a lawyer for Luminar, there were “defects” in the offer. Luminar ultimately decided to stick with the $33 million offer it received in an auction on Monday from a company called MicroVision.

The identity of who submitted this long-shot bid was not disclosed, but Luminar’s attorney said it was an “insider buyer,” meaning it likely came from the company’s founder, Austin Russell.

Russell had already tried to buy the company late last year before it went bankrupt (and after he abruptly resigned as CEO). Representatives from his new firm Russell AI Labs previously told TechCrunch that he was interested in making a bid for the lidar business during the bankruptcy case. (Those same representatives did not respond to a request for comment on Wednesday.)

The hearing continued and the sale to MicroVision was approved. The sale of Luminar’s semiconductor division to a company called Quantum Computing Inc. was also approved.

The transactions are likely to close in the coming weeks, and after that the company will cease to exist, ending one of the most high-profile suppliers of the nascent era of autonomous vehicles.

What MicroVision wants

However, Russell’s goal of using lidar to make cars drive themselves will continue at MicroVision, according to CEO Glen DeVos. As part of the asset sale, MicroVision will get Luminar’s lidar technology as well as remaining staff, and he said he is hopeful that some of the other talent laid off before the bankruptcy will also come on board.

For DeVos, Luminar’s lidar technology is the piece that MicroVision was missing from his company’s portfolio. The Redmond, Washington-based company doesn’t have the same profile as lidar industry leaders like Aeva, Innoviz, Hesai or Ouster, but that’s partly because it lacked the long-range sensing capabilities that are crucial to the automotive sector.

MicroVision has a “very strong” software team, DeVos said in an interview with TechCrunch, and a similarly strong short-range lidar team. But DeVos, who spent a long career at auto suppliers Delphi and Aptiv and took over as CEO of MicroVision last year, is looking to expand beyond the current markets of industrial, security and defense.

“So when we looked at Luminar’s engineering team and what they’ve done, we said, ‘Hey, that’s a big compliment from an engineering capabilities perspective,’” Devos said. “That is critical in this area when it comes to bringing in car companies.”

DeVos said he is hopeful that MicroVision can take Luminar’s existing commercial agreements with automakers — even those that are falling apart, such as the contract with Volvo — and use them as a springboard into the automotive sector, which would mean a huge new source of potential revenue for his company.

“I’ve been in the automotive industry for a long time. I’ve had experience of contractual relationships that have gone off the rails and I’ve worked very hard to get them back on track. We’re going to look at them all. We’re not going to assume that they’re all beyond repair,” he said. “You never want to get there, but you know, there are ways to put those pieces back together.”

A second mystery bidder?

Although approval of the sale is behind us, Tuesday’s bid was not the first time DeVos and MicroVision have faced a mystery bidder.

During the hearing, attorneys for Luminar and Rich Morgner, a director at Jeffries (who assisted in the sale process) revealed that another unknown party submitted an offer as early as January 12.

That offer was problematic from the jump, Morgner said. Initially, the party’s funding came from a ‘Chinese national company’. When Luminar raised concerns about regulatory approval, Morgner said the bidder had replaced its financing with three different non-Chinese sources.

“One was family money, which we were eventually able to verify. The second was an SPV under the Cayman Islands, which had a broker’s statement showing a round number of funds. And then we also had a European family office that was also part of the financing syndicate,” he said.

Although the lawyers and bankers were able to verify that the “family money” was reliable, Morgner said the large round number in the Caymans SPV seemed suspicious.

“The concern was that the money was coming in… [so] money could come out of it. It wasn’t like looking at a long, dated broker’s statement where you could see the ebbs and flows in the different securities.”

Luminar’s lawyers never revealed the identity of the bidder or whether it was the same party that submitted the bid that disrupted Tuesday’s hearing.